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How to save money by outsourcing to Tier 2 CITIES in India?

Published: Sep 19th, 2017

India, as you can see is the first choice for outsourcing for most companies worldwide. It is basically, the rising number of skilled human resources added to the cost effective solutions, the labor laws that are flexible, boost in productivity and the excellent BPO services that makes it’ the best choice.

At the same time, it is also seen that the preferred places by most companies for outsourcing include Delhi, Mumbai, Calcutta, Hyderabad, Bangalore etc. However, over time, you see that Thailand and Philippines were also fast emerging as the destinations for outsourcing. But, with the entry of Tier 2 cities in India as the outsourcing center, you will see that the overflow was stopped.

Why companies choose Thailand or Philippines as the outsourcing destination?

With Manila and Cebu, setting up BPOs, Philippines was the chosen destination for US outsourcing aided by the less expensive labor, low cost for operations, English as official language and affinity to American culture, all made it the obvious choice. Meanwhile, factors in favor of Thailand as the outsourcing choice includes its liberal economic laws, low cost of living, proximity to china, government support etc.

Advantages of Tier 2 Cities as Outsourcing destinations

In the meantime, you would also have seen how Tier 2 cities of India such as Jaipur, Ludhiana, Chandigarh, Pune, Dehradun, Nasik, Bhubaneswar, Mangalore, Kochi, and Thiruvananthapuram with its advantages, are offsetting Philippines or Thailand as the outsourcing destination.

Few of the advantages of tier 2 cities are given below:

Armed with professional skills and expertise same as those from Delhi, engaging outsourcing services from these cities can be done at lesser costs.

Low cost real estate prices and less investment required for outsourcing to Tier 2 cities than in the metros, helps businesses to cut down the operational costs more.

You will also see the local governments offering more incentives as well as faster processing of applications, as a way to promote more investments, locally.

Cost cuts also help with increased profits for BPO industries.

Tier 2 cities also offer good education facilities to the skilled professionals, however leading to lesser job opportunities as compared to the demand, thereby resulting in companies engaging these professionals at lesser salaries.

Other aspects, in the meanwhile that add to the benefits of outsourcing to Tier 2 cities in India includes, better political stability, better infrastructure and security, stable conditions of labor, high education standards etc.

Key Takeaway: Here, you can see that even if for a time, Philippines and Thailand had emerged as the choice for outsourcing destinations, later due to the skills and expertise made available at cost effective rates, the Tier 2 cities offset these as the best destination to outsource services, ensuring business growth and success.